The current level of action, measured by the 2020 goals, is not sufficient to put the world on track to limit warming below 2 degrees relative to pre-industrial levels. But the level of action has steadily increased over the last 20 years and accelerated recently; more countries are taking on targets and more emissions reduction policies are in place than ever before. The two largest emitters of greenhouse gases – China and the United States – are both stepping up their actions to reduce emissions, separately and together. These measures could have a significant impact on global emissions reductions.

The next few years will be a critical time as countries decide whether to strengthen their 2020 emissions reduction goals under the United Nations Framework Convention on Climate Change (due 2014) and negotiate a new post-2020 climate agreement (due 2015).

Chapter 3 set out a global budget that is consistent with limiting global warming to 2 degrees. Climate change is a global problem and developing a solution will require action by all countries; in particular; major emitting economies like Australia.

Chapter 4 sets out the global context and assesses international trends in emissions reduction activities. Chapter 5 builds on this assessment to consider Australia’s role in international action and how the international context should be factored into the Authority’s recommendations for Australia’s emissions reduction goals.

Chapter 4 discusses:

the Authority’s approach to assessing global action to reduce emissions;

progress under the United Nations Framework Convention on Climate Change (UNFCCC) and other international forums;

climate policies and measures in other countries with a special focus on actions of the world’s two largest emitters, China and the United States; and

post-2020 global climate action.

4.1 The Authority’s approach to assessing global action

The Authority considers that global trends in emissions reductions targets and policies provide the best picture of global action.

Global action is complex – some countries are taking ambitious action now, some are doing less, and the pattern is likely to vary over time. In such circumstances, broad trends are a better indicator than the isolated actions of any individual country at a particular point in time. The exceptions are China and the United States, which together constitute over one-third of global emissions. The Authority has considered the actions of these two countries in some detail given their significant effect on climate change.

In assessing global trends, the Authority has considered both:

targets and commitments to future action; and

domestic policies and measures to reduce emissions.

Both targets and policies are important. Targets provide a useful indication of countries’ intentions; however, targets are, by their nature, aspirational. They can only be met if they are backed by policies and measures that make emissions reductions happen. Targets and policies are mutually supportive – targets can help drive the implementation of climate change policies, while successful policies can make stronger targets more achievable.

The Authority has focused its analysis on emissions reductions outcomes – it has not discriminated on the basis of the form of a commitment (legally binding or not) or where it is inscribed (internationally or domestically). The Authority has therefore taken into account progress under the UNFCCC, but it has also looked beyond – to domestic action and other international forums. While legal form can be an important indicator of how likely action is to occur, ultimately it is emissions reductions that are important for limiting global warming to below 2 degrees.

The Authority’s focus on emissions reduction outcomes was supported by a number of stakeholders, including the Business Council of Australia (Issues Paper submission, p. 8).

Primary sources of information about global action include the United Nations, the World Resources Institute and the Australian Government. In some cases, different data sets have been used for the international analysis than in other chapters of this report to allow for consistent data sets over a wide range of countries. Appendix B provides further details on the data sources used in the Authority’s analysis.

4.1.1 Key countries considered in the Authority’s analysis

The Authority has chosen a set of key countries to illustrate trends in global action throughout the draft report. The set is listed at Table 4.1 and includes countries with similar levels of development to Australia, major emitting economies and Australia’s trading partners and neighbours. The selection takes into account stakeholder feedback by including developed and developing countries, OECD countries, and countries with similarly sized economies and economic structure to Australia (see Origin Energy submission, p. 3; Business Council of Australia submission, pp. 10–11). It also includes four of Australia’s top five trading partners in 2012.

A number of stakeholders emphasised the relevance of considering trade competitors’ actions when setting Australia’s target (including the Australian Industry Greenhouse Network submission, p. 4 and the Business Council of Australia submission p. 14). Identifying trade competitors for the whole economy is difficult as competitors vary widely across sectors, across activities and over time. To the extent that Australia’s competitors are also its main trading partners, they are included in Australia’s key country mix. Legislation currently requires the Productivity Commission to consider which countries constitute Australia’s trade competitors as part of its first review of the Jobs and Competitiveness Program, scheduled in the Clean Energy Act 2011 (Cth) to be conducted in the 2014–15 financial year.

Table 4.1 also describes emissions and development data for each country. Emissions data are presented both as a per cent of global emissions and in per person terms (in tonnes of carbon dioxide equivalent, tCO2-e). The Human Development Index (HDI) is used to provide an indication of countries’ development levels. The HDI is a measure of development compiled by the United Nations Development Programme which combines indicators of life expectancy, educational attainment and income.

4.2 Progress under the United Nations Framework Convention on Climate Change

The UNFCCC is the centrepiece of the international climate change framework. The UNFCCC has facilitated significant progress to address climate change – from an acknowledgement by all countries that climate change is a problem (1992) to emissions reduction goals by developed countries (1997) to emissions reduction goals by all major emitting economies in 2009 (major emitting economies are defined as countries that participate in the Major Economies Forum).

Table 4.1: Key countries – emissions, development and trade analysis

Country

Indicators

Why is this a key country?

Per cent of global emissions Units:
per cent

Emissions per person Units:
tCO2-e

Human Development Index* Index rank: 1=highest

Emissions analysis and trade relationships with Australia

Australia

1.3

25.1

2nd

-

China

22.1

7.1

101st

China is the world’s largest emitter and the world’s second largest economy. Its per person emissions are around the global average. With $118 billion in two-way merchandise trade in 2012, China is Australia’s largest trading partner.

United States

15.3

21.2

3rd

The United States is the world’s second largest emitter and the world’s largest economy. It has per person emissions broadly comparable with Australia’s. With $40 billion in two-way merchandise trade in 2012, the United States is Australia’s third largest trading partner.

European Union
(28 member states)

10.9

9.2

From 4th (the Netherlands to 57th) Bulgaria

As a bloc of 28 member states, the European Union is the world’s third largest emitter, and it has among the world’s most extensive climate policies, including an emissions trading scheme in place since 2005. With $60 billion in two-way merchandise trade in 2012, the European Union accounts for 12 per cent of Australia’s trade.

India

5.5

1.9

136th

India is a large emitting economy with a large population and very low average development. With $15 billion in two-way merchandise trade in 2012, India is Australia’s seventh largest trading partner.

Japan

2.8

9.5

10th

Japan is an advanced OECD economy in Australia’s region and a major emitting economy. With $67 billion in two way merchandise trade in 2012, Japan is Australia’s second largest trading partner.

Germany

2.1

10.9

5th

Germany is a major emitting and large OECD economy. It has strongly promoted renewable technology and is an important developer and manufacturer of some renewable technologies. With $13 billion in two-way merchandise trade in 2012, Germany is Australia’s 11th largest trading partner.

Indonesia

1.9

3.3

121st

Indonesia is an emerging economy in Australia’s Asia–Pacific region. Its development and emissions per person are relatively low by global standards, but growing. With $11 billion in two-way merchandise trade in 2012, Indonesia is Australia’s 13th largest trading partner.

Canada

1.6

19.9

11th

Canada is a resource-intensive OECD country like Australia, with similar extractive industries and economic structure. It has per person emissions similar to Australia’s. With $4 billion in two-way merchandise trade in 2012, Canada is Australia’s 20th largest trading partner.

Republic of Korea

1.4

12.5

12th

The Republic of Korea is an OECD economy in Australia’s region, with a strong focus on ‘green growth’ and sharing the benefits of green growth with developing countries. With $30 billion in two-way merchandise trade in 2012, the Republic of Korea is Australia’s fourth largest trading partner.

United Kingdom

1.4

9.3

26th

The United Kingdom is an OECD developed economy with a similar share of emissions to Australia. With $13 billion in two-way merchandise trade in 2012, the United Kingdom is Australia’s 10th largest trading partner.

South Africa

1.3

11.2

121st

South Africa is an emerging economy with a large resources sector and similar economic structure to Australia. With $2 billion in two-way merchandise trade in 2012, South Africa is Australia’s 28th largest trading partner.

New Zealand

0.2

16.6

6th

New Zealand is an advanced OECD economy in Australia’s region and works closely with Australia on climate change policy. With $15 billion in two-way merchandise trade in 2012, New Zealand is Australia’s ninth largest trading partner.

Norway

0.1

11.2

1st

Norway is a resource-intensive OECD economy, with a large economic dependence on fossil fuel extraction. It is the only country in 2012 with a higher rank in the Human Development Index than Australia. With $0.5 billion in two-way merchandise trade in 2012, Norway is Australia’s 55th largest trading partner.

* HDI is the United Nations Human Development Index, a composite measurement of development.
Sources: Emissions data from World Resources Institute 2013 Climate Analysis Indicators Tool, year 2009, excluding land use. GDP data from International Monetary Fund 2013. Human Development Index rankings from United Nations Development Programme 2012. Trade data from Department of Foreign Affairs and Trade 2013, merchandise trade only, excluding services.

Figure 4.1: Countries with international emissions goals under the UNFCCC

The UNFCCC entered into force in 1994 and, with 195 Parties, it has one of the most universal memberships of any international treaty.

The UNFCCC reflects near-global agreement on a number of key matters:

an objective to ‘prevent dangerous anthropogenic interference with the climate system’;

that all Parties should formulate and implement national programs to mitigate climate change;

that all Parties should report on their emissions and national action through inventories and national communications; and

that developed country Parties should provide support to assist developing countries take action to address climate change and adapt to it.

The Kyoto Protocol to the UNFCCC was adopted in 1997, following the Intergovernmental Panel on Climate Change (IPCC) Second Assessment Report, which found that greenhouse gas emissions could cause changes to the climate unprecedented in human history and that climate change would be virtually irreversible.

The Protocol built on the general commitments of the UNFCCC by establishing specific targets for developed (Annex I) countries to reduce their greenhouse gas emissions. For most Annex I Parties, these targets are expressed as a percentage reduction from a 1990 baseline over the period 2008–2012 (the ‘first commitment period’).

The 2007 IPCC Fourth Assessment Report concluded that the climate was changing faster than predicted in previous reports. This report was closely followed by the 2007 Bali Action Plan under the UNFCCC, which began a new negotiating process to discuss mitigation action by all countries, including the United States (which did not ratify the Kyoto Protocol) and developing countries (which do not have emissions reduction commitments under the Kyoto Protocol).

The Bali Action Plan negotiations were expected to conclude at the 2009 Copenhagen Conference with a mandate to negotiate a new legal agreement. In 2009, however, Parties were unable to come to final agreement, instead ‘noting’ the Copenhagen Accord. While falling short of expectations, the Accord set out significant new steps, which were formally agreed by Parties in 2010 at the Cancun Conference:

an objective to reduce global emissions so as to ‘hold the increase in global temperatures below 2 degrees Celsius’ together with a 2013–15 review to assess the adequacy of this goal in the light of current science;

specific 2020 pledges to reduce or limit emissions by most developed and developing countries. Currently 99 countries have made pledges;

more robust measurement, reporting and verification arrangements for emissions and emissions reductions; and

short- and long-term financial commitments by developed countries to assist developing countries.

The 2011 Durban Conference continued work to clarify countries’ 2020 pledges, as well as setting out a pathway for a post-2020 agreement. This post-2020 agreement will be applicable to all countries, and is due to be concluded by 2015 to come into effect by 2020.

The 2012 Doha Conference saw the formal adoption of amendments to the Kyoto Protocol to create a second commitment period from 2013–2020. Thirty-seven Annex I Parties agreed to take on a target – Australia, Belarus, all 28 European Union members, Iceland, Liechtenstein, Monaco, Kazakhstan, Norway, Switzerland and Ukraine. Russia, Japan and New Zealand did not take second commitment period targets. Canada has formally withdrawn from the Protocol. Importantly, all the Annex I Parties that do not have targets under the second commitment period of the Kyoto Protocol, including the United States, have 2020 targets under the UNFCCC.

Countries are currently reviewing the level of global ambition – both in the context of increasing the strength of Kyoto Protocol emissions reduction commitments, and more broadly under the UNFCCC. Both these reviews will take place in 2014, informed by the IPCC Fifth Assessment Report, which will be completed in 2014.

Negotiations have also begun on the form and content of a post-2020 agreement, which is due to be negotiated by 2015. To work towards this new agreement and aim to increase global effort on climate change, the United Nations Secretary General will convene a leaders’ summit on climate change in September 2014.

The UNFCCC is an important source of information about global action, including national inventories of emissions and national communications by countries explaining what they are doing to address climate change. The 2020 emission reduction goals put forward by countries under the UNFCCC (discussed in Section 4.3) also provide a useful indication of countries’ future intentions.

Recently, there has been much attention on the fact the UNFCCC has not yet agreed on a new treaty with legally binding emissions reduction commitments by all countries. ‘Legally binding’ agreements may provide greater assurance that countries fulfil their committed action. However, they are not the only indicator of action. Significant progress has been made under the UNFCCC beyond a new treaty, including emissions reduction goals and systems to measure, report and verify emissions and emissions reductions.

4.2.1 Other international initiatives

There are a range of international initiatives underway aimed at facilitating climate change action outside of the UNFCCC. These allow countries to exchange practical ideas about reducing emissions and include:

research and development into low-emissions technologies, such as carbon capture and storage, renewable energy and approaches to reduce emission from agriculture;

commitments to reduce or phase out fossil fuel subsidies including under the G20;

linking of emissions trading schemes, such as those of the EU and Norway, and proposed links between California and Quebec, and Switzerland and the EU;

bilateral and regional agreements targeting particular areas of climate change policy; for example, short-lived gases such as methane and hydrofluorocarbons through the Climate and Clean Air Coalition, and carbon markets through the World Bank Partnership for Market Readiness.

Other international initiatives that reduce global warming include the Montreal Protocol on Substances that Deplete the Ozone Layer (The Montreal Protocol), which was designed to ‘phase out’ a range of gases to protect the ozone layer by destroying them safely and replacing them with substitutes. Many of the gases covered by the Montreal Protocol drive global warming as well as damaging the ozone layer, so the phase-out has had a significant positive impact on climate change.

Emissions from international aviation and maritime activities are currently not counted towards individual country emissions or targets under the UNFCCC. Both have nearly doubled in the last 10 years. Discussions to reduce emissions from these sectors occur in the International Maritime Organization and the International Civil Aviation Organization.

Appendix B provides further information on international initiatives outside the UNFCCC.

4.3 2020 emissions reduction targets

Ninety-nine countries, including Australia, have committed to 2020 emissions reduction targets and actions under the UNFCCC. These countries account for over 80 per cent of global emissions and 90 per cent of the global economy. The UNFCCC documents listing countries’ pledges are available on the UNFCCC website.

In many of these countries, these pledges are also included in domestic legislation and national planning documents. Table 4.2 shows the 2020 emissions reduction targets of key countries, both international pledges and, where relevant, additional domestic targets or commitments.

Table 4.2: 2020 Emissions reduction targets of key countries

Country

International and domestic 2020 emissions reduction targets*

Australia

International: 5 per cent, up to 15 per cent or 25 per cent relative to 2000 (5 per cent unconditional).

China

International: Lower carbon dioxide emissions per unit of GDP by 40–45 per cent relative to 2005. Domestic: China’s 2020 target has been incorporated in its medium and long-term economic and social development plans as a binding target. China has an interim carbon intensity target under its 12th Five-Year Plan (2011–2015).

United States

International: In the range of 17 per cent relative to 2005. Domestic: This goal is included in President Obama’s 2013 Climate Action Plan.

European Union (28 member states)

International: 20 per cent relative to 1990. Conditional target of 30 per cent relative to 1990. Domestic: Many European Union countries have climate targets included in legislation or national plans. The European Union also has agreed to a formal ‘burden sharing arrangement’ for some of its collective climate targets.

India

International: reduction in emissions intensity (emissions per unit of GDP) by 20–25 per cent relative to 2005 (excluding agriculture).

Japan

International: 25 per cent relative to 1990.**

Germany

International: 20 per cent relative to 1990, as part of EU target. Domestic: The German Government has included in legislation a national target of reducing greenhouse gas emissions by 40 per cent by 2020 relative to 1990.

Indonesia

International: 26 per cent relative to ‘business as usual’. Domestic: Indonesia’s National Action Plan for Greenhouse Gas Emission Reduction states Indonesia could reduce emissions up to 41 per cent by 2020 relative to business as usual with international support.

Canada

International: 17 per cent relative to 2005. Canada has withdrawn from the Kyoto Protocol, but maintains this target under the UNFCCC.

Republic of Korea

International: 30 per cent relative to ‘business as usual’. Domestic: The 2020 goal is included in Korea’s 2010 Framework Act on Low Carbon, Green Growth.

United Kingdom

International: 20 per cent relative to 1990, as part of EU targets. Domestic: The UK has a domestic 2020 target of 34 per cent below 1990 levels. It also has a series of binding carbon budgets under its Climate Change Act for the period 2008–2027. The 2027 carbon budget represents emissions of 50 per cent relative to 1990.

South Africa

International: 34 per cent relative to ‘business as usual’, and 42 per cent relative to ‘business as usual’ by 2025. Domestic: The 2020 goal is referred to in South Africa’s 2011 National Climate Change Response.

New Zealand

International: Unconditional target of 5 per cent relative to 1990. Conditional target of 10–20 per cent relative to 1990.

Norway

International: 30 per cent relative to 1990. Conditional target of 40 per cent relative to 1990.

* Many countries’ targets are conditional on the extent of climate action in other countries. The conditions can be found in UNFCCC submissions compiled here for developed countries and here for developing countries.
Domestic action included in this table covers targets included in domestic legislation, national planning documents and other official government plans.
** Japan is currently reviewing its energy and climate policies after the Fukushima disaster in 2010.
Sources: International emissions reduction targets from UNFCCC 2011 and UNFCCC 2013; domestic targets from country websites

It is too early to definitively say whether countries will meet their 2020 targets. Many countries are in the process of implementing policies for which the actual mitigation effect is not yet known (for example, Korea’s legislated carbon price and South Africa’s carbon tax). Other countries, including Norway, are intending to meet their targets through using fast-acting policies closer to 2020, such as the planned purchase of overseas emissions units. Countries’ energy mixes can also change rapidly for non-climate-centred reasons and make it either easier or harder to achieve a target, as demonstrated by the United States gas boom and Japan’s nuclear disaster. Finally, ambition of targets is linked to achievability. Countries with strong targets may be less likely to achieve them, although they may still reduce their emissions significantly.

With those important caveats, it is clear that countries are generally taking their targets seriously and bringing in policies to meet them. There is also heartening precedent – most countries that have first commitment period targets listed in Annex B of the Kyoto Protocol appear to be on track to comply with them (two exceptions are the United States, which did not ratify the Kyoto Protocol, and Canada, which withdrew from the Protocol in 2012).

Importantly, the United States and China (the world’s top two emitters, responsible for about 37 per cent of global emissions) are both capable of meeting or exceeding their 2020 targets. The World Resources Institute assessed US policy in 2013, and concluded it could meet its target by using executive powers of the sort recently announced by President Obama (WRI 2013a). Similarly, the Climate Action Tracker Project, run by a coalition of European climate research groups, concluded that China was on track for its 2020 target: ‘Recent energy and emissions data combined with China’s 12th Five-year plan announced in March 2011 indicate that China is set to not only meet its [2020] emissions intensity pledge, but is likely to go beyond it.’ (Climate Action Tracker, 2011).

4.3.1 Aggregation of 2020 targets

A range of studies has attempted to quantify the aggregate emissions reductions associated with the current 2020 UNFCCC emissions reduction pledges. There are high degrees of uncertainty associated with these studies; however, most find that while current 2020 commitments will reduce emissions below business-as-usual projections, they are not sufficient to put the world on track to meet the below 2 degrees global goal.

The United Nations Environment Programme (UNEP) Emissions Gap report series (published annually) is one of the most comprehensive studies aggregating commitments. The report series estimates the difference, or ‘gap’, between the level of projected global greenhouse gas emissions with current 2020 pledges, and the level climate science recommends to limit future temperature increases to below 2 degrees.

The most recent UNEP report finds that the emissions gap for a likely chance of tracking below 2 degrees is 8 to 13 Gt CO2-e (a likely chance is defined by UNEP as 67 per cent). This is equivalent to around 14 to 24 times Australia’s entire annual emissions.

Importantly, the report finds that it is technically feasible to limit temperature increases to below 2 degrees with either greater pre-2020 action or post-2020 action; however, it notes that increasing action post-2020 will be more costly than acting earlier due to lock-in of emissions-intensive infrastructure (UNEP 2012).

4.4 Countries’ domestic policies and measures

Domestic action to address climate change has increased over time. GLOBE notes that in 2012 there were a total of 286 climate change-related laws in the 33 study countries (GLOBE International 2013) – see Figure 4.2.

All the major emitting economies now have domestic policies and measures to support their 2020 emission reduction targets. Policies include incentives for renewable energy, energy efficiency standards, emissions trading schemes and emissions performance standards in electricity generation and transport. Particular approaches vary from country to country depending on its development level, economic structure and the targeted sector or desired response.

Table 4.3 describes the climate actions of key countries in different sectors. Most countries, including China and the United States, have policies in all these sectors. An expanded version of this table is in Appendix B.

Table 4.3: Policies and measures of key countries

Type of policy

Example of policies

Coverage

Energy supply

Renewable energy targets, feed-in tariffs

All key countries have some or multiple energy supply policies in place

Energy demand

Appliance and building energy efficiency standards

All key countries have some or multiple energy demand policies in place

Nearly all key countries other than Australia and New Zealand have some form of mandatory vehicle standards; more than half have greenhouse gas emissions standards

Carbon pricing

Taxes or emissions trading schemes

Most key countries have policies in place at national or subnational level; others including the Republic of Korea and South Africa are planning to introduce policies in 2015

4.4.1 Climate change action in China and the United States

The two countries with the largest impact on global climate change action are China and the United States. Together, they were responsible for over a third of the world’s emissions in 2009 (refer to Box 4.1).

Both countries are acting on climate change. They have put in place policies and measures to address climate change, and are stepping up these efforts1.

Box 4.1: China and the United States emissions and targets*

Emissions (2009)

Each country has committed to an international target to reduce its emissions, and is capable of achieving this target with continued domestic action.

2020 targets

40–45 per cent reduction in CO2 emissions per unit of GDP relative to 2005

17 per cent reduction in emissions relative to 2005

* Emissions data source: 2009, Climate Analysis Indicators Tool, not including land use

China has integrated climate change as a core part of its economic planning. China’s climate targets are included in its central economic policy document for 2011–15, the 12th Five-Year Plan. The Five-Year Plan contains targets for energy intensity (energy consumption per unit of GDP: 16 per cent reduction by 2015 relative to 2010 levels) and CO2 emissions per unit of GDP (17 per cent reduction by 2015 relative to 2010 levels). Achieving these targets would put China on track to meet its international commitments.

China has shown its ability to set and achieve environmental targets. Between 2006 and 2010, China reduced its energy intensity by 19.1 per cent from 2005 levels (The Network for Climate and Energy Information, 2012), and the national government reported that it had closed nearly 500 smaller and less efficient power plants.

China is a world leader in renewable and low-carbon energy. In 2012, $US67 billion in renewable energy (more than a quarter of the world total) and wind power generation capacity grew faster than coal-fired generation capacity (REN21, 2013). It also has the world’s largest installed renewable generation capacity at 90 gigawatts (excluding hydropower, Australia’s comparable renewables capacity was about 5 gigawatts in 2012). The power China produces from wind is now larger than the power it obtains from nuclear (REN21, 2013).

In response to air pollution, China has announced a target of capping coal consumption of 4 billion tonnes of coal equivalent per year, with a parallel cap on coal output of 3.9 billion tonnes in 2015. Although these caps are non-binding, they clearly signal China’s intention to address its energy use and environmental problems. China also tightened its fuel economy standards for passenger vehicles in 2013.

China is implementing market mechanisms to reduce its emissions. Emissions trading commenced in Shenzhen in June 2013, covering more than 600 companies and approximately 31 Mt of CO2 emissions (about the size of South Australia’s annual greenhouse gas emissions). Pilot emissions trading schemes are proposed to start over the next few years in six other cities and provinces Beijing – Chongqing, Shanghai, Tianjin, Guangdong and Hubei. These seven areas make up a third of China’s economy and about a fifth of its energy use (DIICCSRTE, 2013). China plans to start a national emissions trading scheme after 2015.

Action in the United States

US emissions have dipped downwards in recent years, partly due to slower economic growth and a boom in gas production that has reduced coal-fired electricity production. Momentum for stronger climate policy is also building in the United States.

In June 2013 President Obama announced a new Climate Action Plan, in a speech that mentioned Hurricane Sandy and the necessity for immediate federal climate leadership. The Plan aims to reduce US emissions, prepare for the domestic impacts of climate change and increase international climate cooperation. It uses the President’s executive powers to increase regulations on new and existing power plants, accelerate renewable energy development on public land, and direct federal agencies to use more renewable energy and increase their energy efficiency. The combined effect of these measures could be significant – the power plant regulations could prevent the construction of new coal-fired power plants without carbon capture and storage technology.

Strict vehicle fuel economy and emissions standards introduced in 2011 will drive large reductions in emissions (transportation makes up nearly one-third of total US emissions). The US Government estimated that the new standards would save 6 000 Mt of CO2-e between 2011 and 2025, more than 10 times Australia’s 2012 total emissions. The US Energy Information Administration (2013) estimates that there are already two million hybrid vehicles in the United States, and an additional nine million ‘alternative fuel’ vehicles capable of using electricity, ethanol, liquid petroleum gas or natural gas.

The United States has been at the forefront of investment in renewable energy for the past decade. Renewable energy investment in the United States totalled US$36 billion in 2012 and invested $US36 billion in 2012. It is a close second to China in renewable capacity, with 86 gigawatts installed (REN21, 2013.)

Box 4.2: Snapshot of China’s actions

World’s largest investor in renewable energy (US$67 billion in China in 2012).

Proposed scaling down coal use, including non-binding caps on consumption and production.

Closed nearly 500 smaller and less efficient coal power plants by 2010.

Emissions trading scheme operating in Shenzhen and planned for six other provinces and municipalities, to be followed by a national scheme.

Photo Credit: Getty Images

Much action on climate change in the United States is happening at state and local level. Twenty-nine states have adopted greenhouse gas reductions targets or limits, with varying stringency. Nine north-eastern states have in place an emissions trading scheme for their power sector that began in 2009 – the Regional Greenhouse Gas Initiative. California has a separate emissions trading scheme which began in 2013. The scheme will eventually cover most of California’s emissions, which comprise around 7 per cent of total US emissions – equivalent to about 80 per cent of Australia’s annual emissions.

China–US cooperation

The United States and China have committed to work together on climate change.

In June 2013, President Obama and President Xi reached a bilateral deal to work to phase down the consumption and production of hydrofluorocarbons – potent greenhouse gases used in refrigeration and air conditioning – under the Montreal Protocol.

At the two countries’ annual Strategic and Economic Dialogue in July 2013, China and the United States announced renewed cooperation in five areas:

reducing emissions from heavy-duty and other vehicles

carbon capture and storage demonstration

increasing energy efficiency in buildings, industry and transport

improving greenhouse gas data collection and management; and

promoting smart grids.

The United States and China are cooperating on climate change at subnational levels. The US state of California and the Chinese municipality of Shenzhen are working together on air quality. Both regions have emissions trading schemes in place, and have also agreed to share policy design and early experiences from these schemes.

4.5 Post-2020 framework and goals

To achieve the below 2 degrees goal, global action needs to further accelerate before and after 2020. International negotiations to establish a post-2020 framework for action on climate change have begun.

In the UNFCCC, the new agreement is due to be negotiated by 2015 and to come into effect in 2020. Countries including Australia are expected to begin putting forward post-2020 goals in the UNFCCC, possibly as early as 2014.

Australia can influence the development of this framework in the UNFCCC, especially in the context of the new agreement negotiations. The Authority considers it important that the new agreement encourages countries to reduce their emissions and ensures their actions are transparent and verifiable. Facilitating trade of credible emissions reductions could also add to the speed and effectiveness of a global response to climate change.

Alongside the UNFCCC negotiations towards a new agreement, many countries have begun internal policy processes to consider medium-term targets such as 2025 or 2030. Several countries have also set domestic 2050 goals to guide their progress, including the European Union, the United Kingdom, New Zealand, Mexico, Japan and Norway. Table 4.4 sets out current post-2020 goals in key countries. More countries are expected to announce post-2020 goals as international and domestic processes advance.

Box 4.3: Snapshot of US actions

World’s second largest investor in renewable energy after China – nearly half the electric capacity added in 2012 was renewable.

2050
Germany contributes to the EU 2050 targets. It has adopted the EU goal of 80–95 per cent in its energy blueprint.

Considering 2030 targets with EU, decision expected late 2013. Legislation passed in 2010 sets out a road map to 2050, with indicative targets below 1990 levels: 40 per cent by 2020, 55 per cent by 2040, 70 per cent by 2040 and 80–95 per cent in 2050.

2025
42 per cent below business as usual levels set in South Africa’s National Climate Change Response.

South Africa has a ‘peak, plateau and decline’ strategy where its emissions peak between 2020 and 2025, plateau for around 10 years and then fall.

New Zealand

2050
50 per cent below 1990 levels.

Norway

2050
Carbon neutrality (reduce global greenhouse gas emissions by the equivalent of 100 per cent of its own emissions).

If an ambitious global climate agreement is achieved, in which other developed countries also take on extensive obligations, Norway has stated it will undertake to achieve carbon neutrality by 2030.

* Many countries’ targets are conditional on the extent of climate action in other countries. The conditions can be found in UNFCCC submissions compiled here for developed countries and here for developing ones.
Sources are either the UNFCCC submissions or country websites. Key countries not in this table have not yet announced post-2020 goals.

Draft conclusion

C.3 Although the current level of global action is not yet on track to meet the below 2 degree global goal, there is a significant and accelerating trend to global action to reduce greenhouse gas emissions. All the major emitting economies, including China and the United States, have 2020 emissions reduction goals backed by domestic policies and measures.

1 Unless otherwise attributed in text, all information about domestic climate policies in the United States and China has been sourced from publicly available reporting, and verified through the Australian Embassy in Beijing and Washington.